Georgetown: The National Assembly approved tax waivers for two oil companies, Repsol Exploracion Guyana S.A. (formerly known as Repsol Exploracion S.A.) and Ratio Guyana Limited, in accordance with the production sharing agreements (PSAs) for the Kanuku and Kaieteur Blocks respectively, offshore Guyana. Those PSAs are dated May 14, 2013 and April 28, 2015, respectively.
Article 15 of both Production Sharing Agreements, titled ‘Taxation and Royalty’, lists in their own respects, how those companies should be taxed.
Minister Winston Jordan had made orders for both on May 2, 2019.
The tax waivers, according to Jordan’s orders, are based on a precedent set out by Section 51 of the Petroleum (Exploration and Production) Act of 1986, titled ‘Modification of Tax Laws’.
It states, “The Minister assigned responsibility for finance may, by order, which shall be subject to affirmative resolution of the National Assembly, direct that any or all of the written laws mentioned in subsection (2) shall not apply to, or in relation to, a licensee where the licensee has entered into a production sharing agreement with the Government of Guyana.”
An amendment was done on May 12, 2016, for the Kanuku Block, after other oil companies bought into it. It provides so that the terms agreed to between the government of Guyana and Repsol would also apply to those companies.
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